Rice Policy in China: Background and Agricultural Policies
Three stages of rice policies in China from 1953 to present, including state monopoly, market-oriented reforms, and market-based allocation. Analyses on grain production, food security issues, and agricultural policies such as producer support and market price support for rice. Detailed information on subsidies for rice production in China.
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Rice Policy in China Binjian Yan Nanjing Agricultural University
CONTENTS Background Agricultural Policies 02 01 Conclusion Cost and profit of rice production 04 03
Background Three stages of grain(rice) policies 1953-1984: State monopoly of the purchase and marketing of grain 1985-2003: market-oriented reform 1985-1997: double-track pricing system 1997-2003: deepening the market reform 2004- now: market-based allocation with price support Grain Production in China 800000 700000 600000 Quantity (1000 kg) 500000 400000 300000 200000 100000 0 1949 1952 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018 2021
Food security problem after market reform Sharp decrease of rice production from 1997 to 2003 Low profit and cost-profit ratio during this period Profit: 74.8 yuan per mu in 2003 Cost-profit ratio: 17.3% in 2003 Rice production in China 150,000.00 145,000.00 140,000.00 135,000.00 quantity (1000 ton) 130,000.00 125,000.00 120,000.00 115,000.00 110,000.00 105,000.00 100,000.00 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
Agricultural Policies in China Producer Support Market price support (rice,wheat) Payment based on fixed area/yield/production, producer subsidies (corn, soybean, cotton, rice) Payment based on input use Other payments General Services Support Agricultural knowledge and innovation system Inspection and control Development and maintenance of infrastructure Marketing and Promotion Cost of public stockholding
Market price support of rice early indica rice middle indica rice japonica rice domestic price international price 180 5,000.00 160 4,500.00 procurement price (yuan per 50kg) 4,000.00 140 Price (yuan per ton) 3,500.00 120 3,000.00 100 2,500.00 80 2,000.00 60 1,500.00 1,000.00 40 500.00 20 0.00 0
Subsidies of rice in husk Payments are paid based on 85% of the base level of production ( Blue box measure). The subsidy amount is subject to the limit which is calculated according to 85% of the average annul production during the base period (2016-2018). The policy also covers the reduction of the rice planting in heavy metal contaminated areas and the planting with well irrigation in cold region. CNY 18.685 billion in 2020
Payment based on input use Insurance fees subsidy for crops and livestock commodities; Mechanization of farming; Farmland irrigation construction; Soil conservation; Subsidy for production base construction of agricultural industrialization; Other Payment Stabilize farmers income payments Payments for agricultural structural adjustment 100,000.00 Payments for agricultural structural adjustment 90,000.00 Stabilize farmers' income payments 80,000.00 70,000.00 Subsidy for production base construction of agricultural industrialization 60,000.00 Soil conservation 50,000.00 40,000.00 Farmland irrigation construction 30,000.00 20,000.00 Mechanization of farming 10,000.00 Insurance fees subsidy for crops and livestock commodities 0.00 20112012201320142015201620172018201920202021
General Services Support Agricultural knowledge and innovation system Research and development Agricultural extension and advisory services Inspection and control Pest and disease inspection and control Development and maintenance of infrastructure Marketing and Promotion Cost of public stockholding Public stockholding for food security purposes 250,000.00 Public stockholding for food security purposes 200,000.00 I2. Pest and disease inspection and control 150,000.00 100,000.00 Agricultural extension and advisory services 50,000.00 Research and development 0.00 20112012201320142015201620172018201920202021
Cost and Profit of Rice Production profit land cost labor cost commodity and service cost cost-profit ratio 1600 120 1400 100 cost/profit (yuan/mu) cost-profit ratio (%) 1200 80 1000 800 60 600 40 400 20 200 0 0 1978 1985 1990 1995 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Conclusion Rice production should be well supported in market environment. Market price support had a significant impact in short run, but it should not be deviated from market price in the long run. Subsidy will play increasing important role as government budget allowed, and needs to well design. The general service supports, such as research and development, agricultural extension, are fundamental for rice production.
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